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Department of the Treasury

Internal Revenue Service

Instructions for

Form 3520-A

Annual Information Return of Foreign Trust

With a U.S. Owner

Section references are to the Internal Revenue Code unless otherwise noted.

Application for Extension of Time To File Certain Excise,

A Change To Note

Income, Information, and Other Returns.

A Canadian registered retirement savings plan (RRSP) or a

Who Must Sign

Canadian registered retirement income fund (RRIF) is relieved

of any obligation to file Form 3520-A with respect to a U.S.

If the return is filed by:

citizen or resident alien interest holder who is subject to the

•

An individual or fiduciary, it must be signed and dated by that

simplified information reporting requirements of Notice 2003-75,

individual or fiduciary.

2003-50 I.R.B. 1204, with respect to the RRSP or RRIF. It is

•

A partnership, it must be signed and dated by a general

anticipated that most, if not all, such U.S. citizens or resident

partner or limited liability company member.

aliens will be subject to the simplified reporting rules described

•

A corporation, it must be signed and dated by the president,

in Notice 2003-75.

vice president, treasurer, assistant treasurer, chief accounting

officer, or any other corporate officer (such as a tax officer)

How To Access the Internal Revenue

authorized to sign.

Bulletin (I.R.B.)

The paid preparer must complete the required preparer

information and:

You can access the I.R.B. on the internet at

•

Sign the return in the space provided for the preparer’s

(post-1995 Bulletins only). Under contents, select Businesses.

signature.

Under topics, select More Topics. Then select Internal

•

Give a copy of the return to the filer.

Revenue Bulletins.

Penalties

General Instructions

The U.S. owner is subject to a penalty equal to 5% of the gross

value of the portion of the trust’s assets treated as owned by

Purpose of Form

the U.S. person at the close of that year if the foreign trust:

Form 3520-A is the annual information return of a foreign trust

(a) fails to file a timely Form 3520-A or (b) does not furnish the

with at least one U.S. owner. The form provides information

information required by section 6048(b). See section 6677(b).

about the foreign trust, its U.S. beneficiaries, and any U.S.

Additional penalties may be imposed if noncompliance

person who is treated as an owner of any portion of the foreign

continues after the IRS mails a notice of failure to comply with

trust.

required reporting. See section 6677(a).

Criminal penalties may be imposed under sections 7203,

Who Must File

7206, and 7207 for failure to file on time and for filing a false or

A foreign trust with a U.S. owner must file Form 3520-A in order

fraudulent return.

for the U.S. owner to satisfy its annual information reporting

Reasonable cause. No penalties will be imposed if the

requirements under section 6048(b). Each U.S. person treated

taxpayer can demonstrate that the failure to comply was due to

as an owner of any portion of a foreign trust under sections 671

reasonable cause and not willful neglect.

through 679 is responsible for ensuring that the foreign trust

Note: The fact that a foreign country would impose penalties

files Form 3520-A and furnishes the required annual statements

for disclosing the required information is not reasonable cause.

to its U.S. owners and U.S. beneficiaries.

Similarly, reluctance on the part of a foreign fiduciary or

Exception. Canadian RRSPs and Canadian RRIFs are not

provisions in the trust instrument that prevent the disclosure of

required to file Form 3520-A with respect to a U.S. citizen or

required information is not reasonable cause.

resident alien interest holder who is subject to the simplified

information reporting requirements of Notice 2003-75 with

Definitions

respect to the RRSP or RRIF. In addition, other eligible

Canadian plans within the meaning of section 3 of Rev. Proc.

Distribution

2002-23, 2002-15 I.R.B. 744, are relieved of any obligation to

A distribution is any gratuitous transfer of money or other

file Form 3520-A with respect to a U.S. citizen or resident alien

property from a trust, whether or not the trust is treated as

beneficiary who has made an election in accordance with

owned by another person under the grantor trust rules, and

section 4 of Rev. Proc. 2002-23 and has complied with the

without regard to whether the recipient is designated as a

annual reporting requirements of Rev. Proc 2002-23.

beneficiary by the terms of the trust. A distribution includes the

receipt of trust corpus and the receipt of a gift or bequest

When and Where To File

described in section 663(a).

File a complete Form 3520-A (including pages 3 and 4) with the

A distribution also includes constructive transfers from a

Internal Revenue Service Center, Philadelphia, PA 19255, by

trust. For example, if charges you make on a credit card are

the 15th day of the 3rd month after the end of the trust’s tax

paid by a foreign trust or guaranteed or secured by the assets

year. Give copies of the Foreign Grantor Trust Owner

of a foreign trust, the amount charged will be treated as a

Statement (page 3) and the Foreign Grantor Trust

distribution to you by the foreign trust. Similarly, if you write

Beneficiary Statement (page 4) to the U.S. owners and U.S.

checks on a foreign trust’s bank account, the amount will be

beneficiaries by the 15th day of the 3rd month after the end of

treated as a distribution.

the trust’s tax year.

Also, if you receive a payment from a foreign trust in

An extension of time to file Form 3520-A (including the

exchange for property transferred to the trust or services

statements) may be granted. For details, get Form 2758,

rendered to the trust, and the fair market value (FMV) of the

Cat. No. 25096U

Instructions For Form 3520-A - Annual Information Return Of Foreign Trust With A U.s. Owner - 2003

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